KPMG comments on today’s Bank of England Monetary Policy Committee decision

“Bank of England strikes a balanced tone with today’s cut to the bank rate” says Yael Selfin, Chief Economist at KPMG UK.

“After a pause in September, the Monetary Policy Committee (MPC) felt compelled to cut the bank rate by another 25 basis points. A cut had been widely expected, as both pay growth and inflation continued to ease in recent data, with both measures significantly below the Bank’s projections at the time of the first cut in rates back in August.

“However, the large fiscal loosening announced in the UK Budget and some of the proposed policies from the incoming US administration could impact inflation levels next year. The MPC may now feel the need for another pause in December and to limit the pace of cuts in 2025 as a way to lean against these potential inflationary pressures.

“The remarks accompanying the decision struck a balanced tone, stressing the need to maintain price stability and respond to economic shocks. However, with the balance of inflation risks now skewed back to the upside, we see the base rate settling at around 4% by the end of 2025.”

-ENDS-

For further information please contact:

KPMG Media Relations

Gerard Swinley

gerard.swinley@kpmg.co.uk

M: +44 7510 375540

T: +44 20 3078 3948

Notes to Editors: 

About KPMG

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